AstraZeneca gets three-year pause on Trump tariffs: CEO

AstraZeneca gets three-year pause on Trump tariffs: CEO

In a significant development, AstraZeneca Plc (NASDAQ: AZN) has announced a three-year pause on Trump tariffs, according to a statement from the company's CEO. This move comes as part of a broader effort to align drug pricing with international standards and address the standoff over drug pricing in the United Kingdom .

The pause on tariffs is part of a deal between AstraZeneca and the UK government, which aims to resolve the ongoing dispute over drug pricing. The agreement includes a 25% increase in the amount the National Health Service pays pharmaceutical firms for medicines . This increase is designed to align drug prices with international standards and encourage pharmaceutical investment in the UK.

The agreement also involves raising the National Institute for Health and Care Excellence (NICE) cost-effectiveness threshold by 25% . NICE currently considers medicines costing £20,000–£30,000 per additional year of quality life as good value. The Association of the British Pharmaceutical Industry has called for a threshold of £40,000–£50,000 pounds, adjusted for inflation, requiring increased NHS funding over time .

The pause on tariffs is part of a broader effort to encourage pharmaceutical investment in the UK. AstraZeneca has paused a planned investment of £200 million in its Cambridge research site due to the slow progress on life sciences investments and successive governments' undervaluation of innovative medicines .

The Liberal Democrats have criticized the proposal, questioning the cost and warning it could trigger cuts elsewhere in the NHS . Science Secretary Patrick Vallance has acknowledged that UK spending on new medicines—currently 9% of overall NHS expenditure—lags behind the US and many European countries .

In addition to the pause on tariffs, AstraZeneca has announced plans to invest $4.5 billion in its new manufacturing facility in Virginia, a proposed increase of $500 million to support the enhanced manufacturing capability of a broader range of medicines, including cancer treatments .

The pause on tariffs is expected to have a positive impact on AstraZeneca's stock price, with shares trading down 0.38%, sitting at $84.72 at the time of publication on Friday . The stock is 2.1% below the 52-week high but still 7.5% above the 50-day moving average .

In summary, the three-year pause on Trump tariffs for AstraZeneca is a significant development that reflects the company's efforts to align drug pricing with international standards and encourage pharmaceutical investment in the UK. The agreement also includes a 25% increase in the amount the National Health Service pays pharmaceutical firms for medicines and a raise in the NICE cost-effectiveness threshold.